Southern Farmers: We Need Direct Payments

Rice growers in the southern U.S. say direct payments are a safety net that’s essential to their farming operations.

Farm bill discussions are heating up in Washington, D.C., this week. Some think the Senate version may leave the Ag Committee and enter the Senate floor as early as the end of this week. While both the Senate and House versions of the 2013 farm bill eliminate direct payments, cotton and rice farmers say they’d like to see it stay. "AgDay" National Reporter Tyne Morgan visited with rice growers last week who say direct payments are a safety net that’s essential to their farming operations.

The planting race is under way in Arkansas. Wheels are turning in the field, but frustrations are surfacing in the cab, as these farmers know direct payments could soon be a thing of the past.

"It’s really taken the safety net out of our cropping system," says Joe Mencer, farmer in Lake Village, Ark. "We farm cotton and rice here. Those are two real high-input crops. Without the direct payment, it's going to be hard to get financing for those crops.

As the prospects of their safety net diminish, many farmers have been forced to change their cop plans.

"I've cut my (cotton) production 1,500 acres this year," he says. "If we lose the direct payments, I probably won't grow cotton, unless they raise the target price to up around $.80."

It’s the same situation for rice, which is already a fairly small segment of U.S. production agriculture. This year, USDA estimates total U.S. rice planting at just over 2.6 million acres. That’s down from 2.7 million in 2012. Arkansas remains the biggest rice producing state, but acres are on a downward slope and could drop even more if planting continues to be delayed.

These farmers say it’s more than just the cotton and rice crops that could suffer if direct payments are eliminated.

"Rice is very labor intensive," says Eric Stevens, who farms in Dermott, Ark. "I have to hire extra labor to take care of it. So, I use that money, to put people to work, which in turn, takes money and puts it back into the local economy."

Losing their safety net isn’t the only thing impacting the decline of rice acres in this country. Outside markets are also coming into play.

"The last month or so we've had a case where some rice mills are importing rice from Vietnam," says Mencer. "We're afraid we may be headed down the road with rice that the catfish industry faced several years ago."

Many farm-raised catfish producers know the situation all too well. Increased imports at a cheaper price have forced many farmers out of business. USDA shows the number of catfish operations in the U.S. has steadily declined the past five years. In just one year, the number of operations dropped from 718 in 2012 to 624 in 2013.

"If the cost of production of rice keeps rising with high fuel high fertilizer, these mills have to run," Mencer says. "And if they can't buy the rice here as cheap as they can import it into the U.S., our price will steadily decline."

Mencer says the drought in Texas is also forcing acres out of production. Earlier this year the Lower Colorado River Authority announced it would cut off water to three major rice growing counties in Texas. Mencer says that’s opening the door for even more rice imports into the U.S.

To be proactive, Mencer has been switching to rice varieties that help him get a better price.

"We're switching over to growing some aromatics, contracting growing for some rice mills down in Louisiana," he says. "It's our way of trying to compete with some of the imports coming into the U.S."

Considering all of these elements, many Southern growers say they need a safety net, and simply don’t want to see direct payments go away. Many growers have faced the inevitable.

"Chances are slim that we'll get it back," says Mencer. "We accepted that year ago. We keep asking for it, but chances are it won't happen."